Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks rebound to 21,643 on U.S. rate cut hopes

JIJI

Stocks turned higher on the Tokyo Stock Exchange on Thursday, after increased expectations for an early U.S. interest rate cut sent Wall Street higher overnight.

The 225-issue Nikkei average rose 110.05 points, or 0.51 percent, to end at 21,643.53, after losing 31.67 points on Wednesday.

The Topix index of all first-section issues closed up 7.31 points, or 0.47 percent, at 1,578.63. It fell 3.57 points the previous day.

The Tokyo market opened higher, after the Dow Jones Industrial Average marked a record intraday high on Wednesday as U.S. Federal Reserve Chairman Jerome Powell suggested an interest rate cut at the Fed’s policy-setting meeting to be held at the end of July.

Both the Nikkei and Topix accelerated their upswing later in the morning, supported by higher stock prices in other Asian markets, brokers said.

But the yen’s strengthening against the dollar due to increased U.S. rate cut expectations weighed on the Tokyo stock market.

“Now that a U.S. interest rate cut is increasingly likely (at a time when a cut is not absolutely necessary), foreign investors apparently boosted buying of Japanese stocks in anticipation of a further rise on Wall Street,” said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.

But overall, trading remained lackluster amid “a lack of active participation from Japanese investors,” he also noted.

“There are many wait-and-see factors piling up in the Tokyo market,” such as the start of first-quarter earnings report season later this month and the July 21 House of Councilors election, an official of a major securities firm said.

Rising issues far outnumbered falling ones 1,660 to 429 in the TSE’s first section, while 60 issues were unchanged.

Volume slightly increased to 1.140 billion shares from 1.138 billion shares on Wednesday.

Oil names attracted purchases, reflecting higher crude oil prices, with Inpex gaining 2.26 percent, Idemitsu 2.19 percent and JXTG 1.44 percent.

Nintendo jumped 4.15 percent on expectations for its new game console, due out in September, brokers said.

Among other major winners were clothing store chain Fast Retailing and technology investor SoftBank Group.

Japan Post Insurance plunged 6.41 percent in the wake of an inappropriate insurance sales scandal.

Also on the negative side were Toyota and drugmaker Eisai.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 100 points to end at 21,600.

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